A.I.M. Users Bulletin Board

[lostcowboy]

Hi Cjam, glad you came back. I am still working on understanding your system. If I am understanding correctly. You take your fund and split it into 12 equal parts and invest one part each month with the idea of holding it for one year, unless that month has a loss of 5% based on the price that month was bought at. I am basing this on your rolling 12 month reference. http://www.cjam.pwp.blueyonder.co.uk/html/current.html

Food for thought, have you considered ratcheting up the stop loss's each month to 5% less than the current price? this would have the effect of selling all positions upon a loss. Some of the positions would be sold at a profit, then next month you start all over again. Or you could keep the months separate. One could also base the stop loss on how much profit a month has. You could set it up for 5% loss to start and ratchet it up to 5% of the current price or 80% of the current profit , which ever is lower. Lets follow one month. You buy the stock at $100. The stop loss is set at $95, the next month the stock is at $105, new stop loss would be $99.75(5% loss). If you use 80% of profit you would set the stop loss at $104, $99.75 is lower. Lets say after several months the price is $150, the new stop loss would be $142.5 or $140, in this case $140(80% of the current profit).